Stakeholder feedback encouraged
The Financial Markets Authority (FMA) is seeking stakeholder feedback as it begins consultations on its approach to outcomes-focused regulation, including fair outcomes for consumers and markets it wants to see financial service providers focus on.
The FMA is shifting towards outcome-focused regulation, which prioritises desired results for consumers and markets, but does not replace or introduce new rules or regulations.
Since the release of the “Guide to the FMA’s view of conduct” in 2017, FMA has expected firms to provide fair outcomes, and the current consultation signals the approach the regulator will employ in working with the industry to fulfill this objective.
FMA is consulting on ensuring fair outcomes for consumers and markets, including:
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Consumers having access to suitable products and services tailored to their needs
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Providing consumers with informative content for sound decision-making
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Ensuring consumers receive fair value for their money
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Ensuring providers can be trusted to act in the best interests of consumers
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Ensuring consumers receive quality ongoing care
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Cultivating trust in markets through integrity and transparency
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Facilitating sustainable innovation and growth within markets
Financial product and service providers are anticipated to assume responsibility for the outcomes and to evaluate how their governance, leadership, management, and operations collaborate to achieve these results in a manner most suitable and efficient for their business.
FMA said developing a consistent and clear approach enhances certainty, making its vision clearer and practical for the financial sector.
“These outcomes will inform how we exercise our role as a kaitiaki of financial markets and our approach to supervisory and enforcement work,” Liam Mason, FMA general counsel and executive director for evaluation and oversight, said in a media release. “It will support our work towards the FMA’s vision of more New Zealanders than ever believing our financial markets work well for them.
“We will always be a risk-based regulator, able to use a range of tools to respond proportionately to the harms and misconduct we identify. We believe that beginning our conversations with firms based on the outcomes we want to see, will help prevent harm in the first place.”
Mason said that as FMA transitions into a more outcomes-focused regulator, there needs to be a shift in both culture and mindset for the organisation and firms to think about the desired results and their shared interest in delivering positive outcomes for New Zealanders.
“The first step in this shift is the consultation, and we will be engaging and listening to all of our stakeholders over the next few months,” he said.
Download the proposed fair outcomes for consumers and markets consultation, PDF
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